Part I. Part II. DIVISION C PRINCIPAL AND AGENT Nature and Formation of Agency. The Duties and Liabilities Arising Out of the Part III. Professional Agents. Part IV. Termination of Relationship. PART I NATURE AND FORMATION OF AGENCY Chapter 23. Definitions. Chapter 24. Capacity of Parties and Power of Delega tion. Chapter 25. The Appointment of the Agent. § 185. (Agency, Sec. 1.) Nature of agency. Case 195. Mechem, Agency, Sec. 25, 26 and 36. "Sec. 25. Agency defined. The word agency when used in its broad meaning as pointed out in the preceding chapter indicates the relation which exists when one person is employed to act for another. In this aspect, it has, in our modern law, three chief forms: 1. the relation of principal and agent; 2. the relation of master and servant, or in the more modern phrase, the relation of employer and employee; and 3. the relation of employer or proprietor and independent contractor. All of these have some points of similarity, but at the same time many aspects of real distinction. "Of the three forms here suggested the one with which this work has chiefly to do, is the first or the relation of principal and agent. At the same time the three relations, and particularly the first two, are so closely related, and the actor in these first two forms so frequently acts in both capacities or so largely combines them both in his own person that it is convenient and often desirable to consider them side by side. Moreover, even though they be distinct, the rules which govern one relation are so frequently identical with those which apply to the other, that one statement will suffice for both, and illustrations may be freely drawn from either field. ** "Sec. 26. Principal and agent. The relation of principal and agent, or the relation of agency in the narrower sense in which it is chiefly employed in this work, is the legal relation which exists where one person, called the agent, is authorized-usually by the act of the parties, but occasionally perhaps, by operation of law, to repre sent and act for another, called the principal, in the contractual dealings of the latter with third persons. The distinguishing features of the agent may briefly be said to be his representative character and his derivative authority. "Sec. 36. How agent compares with servant. The distinction between the relation of principal and agent and that of master and servant is not always easy to define. As has been seen, the relation of principal and agent is of comparatively late development in our law; it was preceded by the relation of master and servant, and from the law respecting that relation, the earliest precedents concerning agents were drawn. The two relations are therefore very closely allied, and it is sometimes said they are not distinguishable. Nevertheless, notwithstanding this common origin, it is entirely possible to distinguish them, the line of distinction seems in the main to be a logical and natural rather than a purely artificial one; and there can be no doubt that now for many years there has been developing a body of law known as the law of agency or of principal and agent and that a distinction between this relation and that of master and servant has come to be generally recognized. It is upon the basis of this fact that the present discussion proceeds and an attempt is made to show what the line of demarcation is thought to be. "The characteristic of the agent is that he is a business representative. His function is to bring about, modify, affect, accept performance of, or terminate, contractual obligations between this principal and third persons. To the proper performance of his functions, therefore, it is absolutely essential that there shall be third persons in contemplation between whom and the principal, legal obligations are to be thus created, modified or otherwise affected by the acts of the agent. "The function of the servant on the other hand, as his name suggests, is the rendition of service,—not the creation of contractual obligations. He executes the commands of his master, chiefly in reference to things, but occasionally with reference to persons when no contractual obligation is to result." Question 195: (1) In what three possible situations may one person employ another to act for him? (2) When does the relation of principal and agent exist? (3) What distinguishes a servant from an agent? (4) May the same person be employed under one contract to perform acts that are those of service, and acts that are those of agency? (5) P employs A to take charge of a small store owned by P. A's duties are (a) to purchase goods; (b) to sell goods; (c) to keep the store in order; (d) to keep a set of books; (e) to collect accounts. In which of these cases is he agent, and which servant! (Note: The words "agent" and "agency" are frequently loosely used. A person will be spoken of as having an "agency" when he carries the goods of another person although he buys and resells such goods and carries his own accounts. Thus, it will be said that John Doe has the agency for the "Excelsior" tires, when in no respect is he really employed by the Excelsior Tire Co., and in no respect has any authority to contract in the name of that Company. He is a mere retailer with a contract under which he buys and resells Excelsior Tires. But on the other hand he might indeed have an agency.) Case 196. Echols, Defendant v. State, 158 Alabama Reports, 48. Facts: Echols was indicted for the crime of embezzlement and convicted in the lower court. The charge against him was that he, "being an agent, servant or clerk of affiant (the prosecuting witness), embezzled or fraudulently converted to his own use money to about the extent of $18.00. The evidence was that Echols was a tailor and agreed to make a suit of clothes for the prosecuting witness for part cash and part future payment. That the part cash ($18.00) was paid, that defendant Echols wrongfully refused to deliver the clothes without a further payment and also refused to return the $18.00. (Note: The crime of embezzlement is the crime of feloniously appropriating to one's own use funds which one has in his possession belonging to another, as the case of an agent who takes the funds which he has in charge. It differs from theft or larceny which are crimes involving wrongful taking. In |